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10 Reasons to Invest in U.S. Commercial Real Estate

Global real estate investment is becoming more and more prominent on the commercial real estate radar, with a number of factors contributing to growth. The U.S. market is attractive to foreign investors for many reasons, despite obstacles posed in some cases by fluctuating exchange rates and burdensome tax law.

According to some sources, foreign investors currently account for up to 24% of U.S. real estate investment sales. China has recently replaced Canada as the nation with the highest rate of participation in the U.S. real estate market. CBRE reports that Chinese outbound capital flows into global commercial real estate markets have exceeded $10 billion over the past year. What makes this an attractive opportunity? Here are 10 reasons why U.S. commercial real estate is a great investment.

Productive US Monetary Policy

Low interest rates resulting in cheap financing
have encouraged CRE investment, and the comparatively low yields in bond
markets has also made these investments more attractive to both foreign and
domestic buyers.

Improvement in Commercial
Property Loans

Financing continues to be
readily available, with commercial lending increasing by 16% in the last 3 years. Commercial lenders are competing
for deals, and banks are relaxing lending standards to allow developers to put
up less money to secure financing in many cases.

Population Growth

A number of secondary markets
are seeing a jump in population as people follow the jobs. This is particularly
true in Texas, with rapid growth in Houston, Austin, and Dallas-Ft. Worth,
fueled by the technology and energy sectors. Increased development and
infrastructure improvements provide opportunities for investment.

High-Quality Commercial Real
Estate

U.S. commercial real estate is
a mammoth industry, worth trillions of dollars, and it includes about a quarter
of the world’s high quality commercial properties. The New York market alone
has more office space than Canada’s entire market.

Strong Economy

The U.S. economy is the most
stable and open in the world, and attracts buyers from countries where the
situation is much more volatile. Foreign investors can operate with relative
freedom in the U.S.

Tax Benefits

Real estate owners can benefit
from the US Tax Code in a number of ways. Depreciation deductions and mortgage
interest can protect a large portion of investment income.

Investor Control

There’s a high level of control
available to investors in the U.S. commercial real estate market. Investing in
stocks is a more passive activity, while investors can handpick properties from
the inventory of U.S. commercial properties.

Real Estate Prices Are
Skyrocketing in other Countries

With the skyrocketing of real
estate prices in places like Dubai, London, China and Singapore, the US offers
an ultimate bargain for those with cash to spend. In China, for example,
commercial real estate prices jumped by over 35% in 2012 alone.

Steadily Increasing Demand

The interest from foreign
investors continues to grow –particular with buyers from Europe, Asia, and the
Middle East. This has already tightened competition in the country’s primary
markets, but secondary cities still offer a wealth of opportunity.

A Buyer’s Market

Prices are currently very low
in U.S. commercial properties. They’re down 30% overall from their peak, and
this makes U.S. commercial real estate the best bet for international
investors, as well as an attractive option for domestic buyers.

There can be no doubt that it’s
a good time to invest in commercial real estate in the U.S. Its long-term
stability and attractive inventory keep it at the forefront of international
investment and continue to present opportunities that seem too good to pass up.